I learned important lessons early in my career about internal audit independence and the impairments that can come from reporting relationships. I began my career as a civilian internal auditor for the U.S. Army. At the time, we had more than 1,900 internal review (audit) auditors in more than 300 Army installations and commands around the world. Virtually every one of them worked directly for the comptroller — essentially the equivalent of a corporate chief financial officer (CFO).
Recognizing the importance of auditor independence throughout government, the U.S. comptroller general soon strengthened the independence standards for government auditors and issued new standards that required internal auditors to report to the “head or deputy head” of government agencies.…